William Malcolm

Gigafactory Could Bring Thousands Of Jobs To Czech Republic

The construction and operation of a lithum battery cell factory will bring the Czech Republic billions of crowns in gross domestic product (GDP) and thousands of new jobs. The so-called gigafactory project can positively influence the domestic economy and support the transformation of traditional coal regions, according to a study by the consulting company Deloitte, which was prepared for the Association of Modern Energy. The authors presented it at today’s press conference. 

In the investment phase alone, according to a Deloitte study, one factory with a production capacity of 40 gigawatt hours would create around 6,000 jobs. The operation alone would create another approximately 33,000 new jobs in production and related supply companies, according to the study. According to Deloitte chief economist David Marek, the project would increase the GDP of the Czech economy by 185.9 billion crowns, which represents 3.6 percent of the Czech GDP in 2020. The operation of the factory would increase the Czech GDP by 172.1 billion crowns, and construction by 13.7 billion crowns. billion crowns, he said. The study takes into account the period from 2023 to 2031.

“Having our own battery factory, at least one, is a logical and strategic step for the Czechia, because our economy is heavily dependent on the automotive industry. But we are playing for time and the one who will be able to move quickly will have all the trumps in his hands, “said the head of the Czech branch of Deloitte Josef Kotrba, who leads the company’s energy consulting team.

At the end of July, Deputy Prime Minister Karel Havlíček (for YES) and CEO of ČEZ Daniel Beneš signed a memorandum on support for the planned project of a battery factory in the Czech Republic. According to Havlíček, Volkswagen, of which Škoda Auto is a part, and the Korean LG are interested. According to earlier information, the investment in the first phase should amount to at least 52 billion crowns, and in connection with it, the creation of at least 2,300 new jobs is expected. A favorite for the construction is the area of ​​the former brown coal power plant Prunéřov 1.

“Although the Czech government has signed a memorandum with ČEZ, we need to urgently address the specific form of support and actively seek investors and strategic partners. We must realize that if capacity does not arise in our country, it will certainly be created elsewhere in Europe. added value will be moved outside our territory, “said Kotrba. Prime Minister Andrej Babiš (YES) stated at the beginning of Septemberthat on October 1, the factory will be negotiated with Volkswagen boss Herbert Diess.

CEZ previously stated that the planned factory for batteries for electric cars could produce batteries with a capacity of more than 30 gigawatt-hours, which is enough for 400,000 to 800,000 passenger cars per year. The Deloitte study estimates that thanks to the project, public finances, ie the government, municipalities and regions, would improve by 48.6 billion crowns, while the analysis does not take into account investments in the creation of the local chain itself.

“Support for the construction of a gigafactory for the production of car batteries is a pragmatic step. Although the production of batteries can be considered mainly as an assembly plant I consider this goal to be a good move to combine this goal with the reclamation of coal regions, the future of which will have to be solved anyway, “said Pavel Sobíšek, Chief Economist of UniCredit Bank.

The possible establishment of a factory in the Czech Republic is supported by the Association for Energy Accumulation AKU-BAT CZ. According to its executive director Jan Fousek, however, the project will have real added value only if the entire battery value chain can be created – from the extraction of raw materials and their processing to secondary use and their recycling. “We believe that a decision will be made soon, the government cannot fall asleep. The demand is not only on the side of potential investors, but also on the side of demanding batteries,” Fousek said.

Also, according to Natland’s chief economist Petr Bartona, it will depend mainly on whether the factory will establish additional operations. “The factory itself will probably not raise much the level of added value of our exports – in which we have lagged behind developed OECD countries for a long time. But if the factory becomes the core around which truly sophisticated production is concentrated, .

Škoda Auto recently announced that it will sell 50 to 70 percent of its cars in Europe in ten years, and last year it sold over 650,000 cars in Europe. This would mean that, while maintaining the volume of production, it will produce 300,000 to 450,000 cars per year of electricity at the beginning of the next decade. Last year, the share of Škoda cars produced in electricity was below five percent. The new Enyaq and at least three other electric cars, as well as an expanding group of hybrids, are expected to contribute to the growth. In addition to Škoda, Hyundai also manufactures electric cars in the Czech Republic.

According to EY’s analysis, up to 80,000 electric cars, ie electric cars or plug-in hybrids, could be sold in the Czech Republic in 2027, which would correspond to about a third of the market. Last year, more than 5,200 cars were sold in the country in the drawer.